Financial Crime World

Here is the rewritten article in Markdown format:

Dealers in Virtual Currencies Must Register as Money Service Businesses

=====================================================

A new era of transparency is unfolding for dealers in virtual currencies, as governments around the world tighten regulations to combat money laundering and terrorist financing.

Bringing Stability and Trust to the Crypto Market

In a bid to bring stability and trust to the crypto market, authorities are requiring dealers in virtual currencies to register as Money Service Businesses (MSBs). This move comes as part of Canada’s Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations (PCMLTFRs).

European Union Takes Action

Across the European Union, a new Anti-Money Laundering Directive has been introduced, bringing crypto-to-fiat exchanges and custodial wallets into scope. The EU is also set to introduce an AML/CTF package that will have significant implications for cryptoasset service providers.

United Kingdom’s Plans

The United Kingdom’s government has announced plans to make the country a global cryptoasset technology hub, recognizing stablecoins as a form of payment. The UK’s regulator, the FCA, has issued Dear CEO letters on managing cryptoasset risks and recently released a joint statement from UK financial regulatory authorities on sanctions and the cryptoasset sector.

Asia Pacific Region

Australia

  • Cryptoassets are treated as either financial products regulated by ASIC or consumer products regulated by the ACCC.
  • Cryptoasset exchanges or secondary service providers must register with AUSTRAC for AML/CTF purposes.

Singapore

  • Cryptoassets are treated as “digital payment tokens” under the Payment Services Act (PSA).
  • Providers of these services must be authorized by the Monetary Authority of Singapore (MAS).

Japan and China

Japan

  • Different types of tokens are subject to different regulations, enshrined in the Payment Services Act.
  • The country is likely to introduce new licensing requirements and powers for its financial regulator.

China

  • China has banned all cryptocurrency transactions except those involving its own digital yuan.

The Risks of Non-Compliance

Non-compliance with anti-money laundering regulations presents significant risks for crypto firms, including facilitating sanctions evasion and enabling terrorist financing. The consequences of non-compliance can be severe, including being denied a license to operate or forced to relocate or close.

Staying Ahead of the Game

Proactive Regulatory Approach

  • Conduct horizon scanning to stay up-to-date with regulatory changes.
  • Map upcoming regulatory changes to compliance budgets.
  • Understand new requirements and their impact on your business.

Building an AML Program

  • Invest time in having a dialogue with local regulators.
  • Contribute to regulatory consultations.

Download Our Guide

To learn more about the latest developments in AML compliance for crypto firms, download our comprehensive guide today. Download Now